What should be the current price of the companys stock?

s cash flow statement fo Show more Using the following information answer the following questions. Cumberlands cash flow statement for 2014. Cumberland Industries December 31 Balance Sheets Cumberland Industries December 31 Balance Sheets Cumberland Industries December 31 Balance Sheets Cumberland Industries December 31 Balance Sheets (in thousands of dollars) (in thousands of dollars) 2014 2013 Assets Cash and cash equivalents Cash and cash equivalents $91450 $74625 Short-term investments Short-term investments $11400 $15100 Accounts Receivable Accounts Receivable $103365 $85527 Inventories $38444 $34982 Total current assets Total current assets $244659 $210234 Net fixed assets Net fixed assets $67165 $42436 Total assets $311824 $252670 Liabilities and equity Liabilities and equity Accounts payable Accounts payable $30761 $23109 Accruals $30477 $22656 Notes payable $16717 $14217 Total current liabilities Total current liabilities $77955 $59982 Long-term debt Long-term debt $76264 $63914 Total liabilities Total liabilities $154219 $123896 Common stock Common stock $100000 $90000 Retained Earnings Retained Earnings $57605 $38774 Total common equity Total common equity $157605 $128774 Total liabilities and equity Total liabilities and equity $311824 $252670 Income Statements 2014 2013 Sales $455150 $364120 Expenses excluding depreciation and amortization Expenses excluding depreciation and amortization Expenses excluding depreciation and amortization Expenses excluding depreciation and amortization $386878 $321109 EBITDA $68273 $43011 Depreciation (Cumberland has no amortization charges) Depreciation (Cumberland has no amortization charges) Depreciation (Cumberland has no amortization charges) Depreciation (Cumberland has no amortization charges) $7388 $6752 EBIT $60884 $36259 Interest Expense Interest Expense $8575 $7829 EBT $52309 $28430 Taxes (40%) $20924 $11372 Net Income $31386 $17058 Common dividends Common dividends $12554 $6823 Addition to retained earnings Addition to retained earnings $18831 $10235 Question 1. (5 points) Calculate Cumberlands net operating working capital (NOWC) total net operating capital (TNOC) net operating profit after taxes (NOPAT) and free cash flow (FCF) for Year 2014. Question 2. (2 points) Cumberlands cost of capital is 16%. Calculate the companys 2014 ROIC. Does Cumberlands growth add value? ROIC= Question 3. (8 points) Hope Industries just paid a dividend of $2.00 per share (i.e. D0 = $2.00). Analysts expect the companys dividend to grow 15 percent this year (i.e. D1 = $2.40) and 10 percent next year. After two years the dividend is expected to grow at a constant rate of 6 percent. The risk free rate is 4% and market risk premium is 5% and the firm is as risky as market. What should be the current price of the companys stock? Show less

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